Tender For Appointment of Internal Auditors of Air India

AIR INDIA LIMITED

INTERNAL AUDIT 02

TENDER FOR APPOINTMENT OF INTERNAL AUDITORS OF AIR INDIA AT DELHI, MUMBAI, CHENNAI, HYDERABAD AND KOLKATA FOR THE PERIOD JANUARY 2019 – MARCH 2020

REGISTERED OFFICE  AIR INDIA LIMITED, AIRLINES HOUSE , 113 – GURUDWARA RAKABGANJ ROAD, NEW DELHI-110001

DISCLAIMER

The information contained in this TENDER or subsequently provided to bidder(s) whether verbally or in documentary or in any other form or on behalf of Air India, is provided to the bidder(s) on the terms and conditions set out in this TENDER and such other terms and conditions subject to which such information is provided.

This TENDER is not an agreement and is neither an offer nor invitation by Air India to the prospective bidder(s) or any other person. The purpose of this TENDER is to provide interested parties with information that may be useful to them in making their technical and financial offers pursuant to this TENDER.

While the document has been prepared in good faith, no representation or warranty, express or implied, is or will be made, and no responsibility or liability will be accepted by Air India (AI) or any of its employees, in relation to the accuracy or completeness of this document and any liability thereof is expressly disclaimed. No contractual obligation on behalf of Air India, whatsoever, shall arise from the offer process unless and until a formal contract is signed and executed by duly authorized officers of Air India and the bidder.

Air India make no representation or warranty and shall have no liability to any person, including any bidder under any law, statute, rules or regulations or tort, principles of restitution or unjust enrichment or otherwise for any loss, damages, cost or expense which may arise from or be incurred or suffered on account of anything contained in this TENDER or otherwise, including the accuracy, adequacy, correctness, completeness or reliability of the TENDER and any assessment, assumption, statement or information contained therein or deemed to form part of this TENDER or arising in any way in the bidding process.

Air India also accepts no liability of any nature whether resulting from negligence or otherwise howsoever caused arising from reliance of any bidder upon the statements contained in this TENDER.

Important Information

Bids will be opened in the presence of bidders’ representatives who choose to attend. The bidders’ representatives must carry a letter of authority on the bidder’s letter-head from the authorized signatory of the bidder, or any other valid document, authorizing them to attend the bid opening, failing which they will not be permitted to participate in bid opening process.

INDEX

A. Contents

1. Background Information

2. Objective of Tender

3. Structure of the Document

4. Submission Procedure and Information for Bidders

5. Scope of Work

6. Technical Evaluation Criteria-Mandatory

7. Bidding Process

8. Evaluation process and selection criteria

9. Signing of Contract

10. Implementation of Internal Audit Assignments and Reports

11. Confidentiality – NON DISCLOSURE AGREEMENT (NDA)

12. Subcontracting or Assignment

13. Indemnity

14. Obligation of Air India as auditee

B. Annexures

ANNEXURE–I General Terms and Conditions

ANNEXURE-II-Scope of Work

ANNEXURE-III Technical Evaluation Criteria – Mandatory

ANNEXURE-IV Bidder’s Profile

ANNEXURE-V Certificate of Undertaking and Compliance

ANNEXURE-VI Authorisation letter for attending bid opening

ANNEXURE-VII Non-Disclosure Agreement

ANNEXURE-VIII Check List of Documents

ANNEXURE-IX Financial Bid Format

C. Appendix

APPENDIX –1 (Attached to Annexure-II) Scope of Work.

APPENDIX- A (Attached to Annexure –IV) Bidder Profile.

TENDER No. AI / INTERNAL AUDIT / 2019-20

1. Background Information

Air India Limited (AIL) is a fully owned Government of India public sector undertaking. Air India Limited (hereinafter referred to as “Air India”) has been incorporated under the Companies Act 1956. Earlier, the erstwhile Indian Airlines Ltd. and erstwhile Air India Ltd. were amalgamated effective 1^st April, 2007 into National Aviation Company of India Ltd.(NACIL) renamed Air India. Air India, now a Star Alliance Partner, is a full service airline and currently operates to 80 stations on the domestic network and 44 stations worldwide with substantial presence in Gulf, South East Asia, Far East, Australia, America & Europe. Air India has a fleet consisting of various types of aircraft including Boeing, Airbus, CRJ & ATRs. Air India competes with both Full Service Carriers as well as Low Cost Carriers (LCCs) on domestic as well as international routes. As on 31^st Mar 2018, Air India had estimated Total Revenue of about Rs.24,000 crores in 2017-18. Turn-Around Plan (TaP) for transition to targeted profitability by improving operational efficiencies, Financial Restructuring Plan (FRP) for Lenders’ support for easing debt burden, and Government support entailing equity infusion are being implemented in phases for turning around the airline’s operations. The Paid up Equity Capital as on 31.03.2018 of Air India is about Rs.28,690 crores.

Air India Ltd has three operational airline units consisting of Air India (AI) operating full service flights, with narrow and wide-body aircraft covering both Domestic and International markets; Air India Express (IX), a fully owned airline subsidiary company, that operates low- cost services, primarily to Gulf and South East Asia and Airlines Allied Services Ltd.(AASL), a fully owned airline subsidiary company operating domestic feeder services using turbo props and regional jets. Air India also has a fully owned operational hotel subsidiary namely Hotel Corporation of India Limited (HCI) operating as Centaur Hotels & flight kitchens. Air India also has a fully owned subsidiary company – Air India Air Transport Services Limited (AIATSL) providing ground handling services to Air India and to other airlines at Indian airports and a fully owned subsidiary company – Air India Engineering Services Limited (AIESL) providing engineering services to Air India and to other airlines. Air India also has a 50:50 joint venture with SATS (Singapore Airport Terminal Services) for carrying out ground handling activities at Hyderabad, Bangalore, Delhi, Trivandrum and Mangalore. The transactions with the above subsidiaries would also require to be reviewed by the selected Internal Auditors being inter-company and related party transactions.

For controlling the financial and accounting issues for these operations including the transactions handled at stations, Air India has its Regional Accounting offices in India at Delhi, Mumbai, Chennai, Hyderabad and Kolkata. There are several systems of international standards which are being used in Air India, which include Passenger Reservation System through SITA, Sabre Flight Planning System, Revenue Management Accounting System reports through outsourcing agency, RAMCO System for managing, controlling and reporting of aircraft inventories and Fuel Efficiency and Gap Analysis (FEGA) conducted with the help of IATA. In December, 2012, accounting has been automated through SAP ERP integrating financial accounting all over the Air India network including payroll processing with interfaces for other real-time integration of processes into financial accounting.

Air India has outsourced processing of its all revenue documents to M/s Accelya solutions ltd. and scrutiny of all pax sales document for correctness of collected fares to M/s. Sutherland Global Services.

For details related to operative network and financial results prospective bidder may refer to Air India’s website www.airindia.in.

02. OBJECTIVE OF TENDER

This TENDER is floated for the purpose of outsourcing Internal Audit activities of Air India in Delhi, Mumbai, Chennai, Hyderabad and Kolkata in compliance to the applicable provisions of Companies Act and Standards of Internal Audit. So, Air India now invites proposals from the CAG empanelled firms/LLPs who meet the required eligibility criteria and are having required skilled resources and capabilities for carrying out this assignment as indicated under the given work-scope for Internal Audit of Air India and who may be qualified to participate in the evaluation exercise.

The selected bidder will take up the Internal Audit assignment under this TENDER for Air India’s operations controlled through offices located at Delhi, Mumbai, Chennai, Hyderabad and Kolkata. It may be clarified that no Joint venture or consortium or association (before bid or after bid) would be allowed for the purposes of this TENDER.

Based on above, Air India invites offers for each of the afore-stated five locations i.e. Delhi, Mumbai, Chennai, Hyderabad and Kolkata from interested and the eligible CAG empanelled firms/LLPs to conduct risk based assessment, identifying the potential risk areas and agree on concurrent Internal Audit Plan for an initial period from January 2019 to March 2020 extendable for a further period of one financial year subject to satisfactory performance of the Internal Audit assignment.

03. STRUCTURE OF THE DOCUMENT

Please complete the Annexures with the required information and submit as a part of the bid.

4. SUBMISSION PROCEDURE AND INFORMATION FOR BIDDERS

a. A bidder may submit bids for one or more locations.

b. Bidders are required to submit their bids in HARD COPIES in two separate sealed envelopes consisting Technical Bid and Financial Bid duly super-scribing “TENDER No. XXXXXXX (Technical Bid)” and “TENDER No. XXXXXX (Financial Bid)” respectively.

c. The envelope containing Technical Bid must also contain all the documents provided in evidence as required as per details in TENDER document.

d. There should be no indication whatsoever, of any pricing information in the Technical Bid.

e. These two separate sealed envelopes containing the Technical Bid and Financial Bid, shall further be sealed in another master envelope, duly super-scribed with the “TENDER reference No. XXXXXXXX, due for opening on XXXXXXXX 2019 at 1230 hrs.” and should be submitted in the TENDER box placed at the address given below. Last date of receipt of bids is XXXXXX 2019 latest by 1500 hours IST.

Office of Executive Director (Materials Management)

Materials Management Department

Air India Limited

Safdarjung Airport, New Delhi – 110 003, INDIA

f. Bids should be submitted on Firm’s letter head, duly signed and stamped on every page by authorized signatory of Bidder.

g. Name of the locations for which bids have been submitted must be stated on each of the three sealed envelopes i.e. Master Envelope containing the Technical bid & Financial bid, envelope containing Technical bid and envelope containing Financial bid.

h. After downloading this document, please communicate your intention to participate in this TENDER with your name, telephone number, postal and email addresses to the following email IDs:- [email protected], [email protected],  pradeep.mittal @air india.in

i. Air India is not responsible for the quotation lost in transit or not received in time including postal delay.

j. Any queries with regard to this TENDER may be addressed to:

Mr. Pradeep Kumar Mittal
AGM(Internal Audit),
Northern Region,
Air India Ltd.,
IGI Airport, Terminal 1
New Delhi 110037
Email: [email protected]

05. SCOPE OF WORK

Detailed work-scope has been given in Annexure-II.

06. TECHNICAL EVALUATION CRITERIA – MANDATORY

6.1 The qualification for selecting a bidder will primarily depend upon the level of expertise and experience, capacity and capability of the bidder to successfully execute the Internal Audit assignment for Air India. The qualification criteria for eligibility of the bidder to participate in the TENDER process are attached as Annexure III. The eligibility criterion as indicated in the Annexure-III is for each of the locations for which bid is being submitted.

6.2 Non-fulfilment of the prescribed Technical Evaluation Criteria and not providing any of the requisite documents or furnishing incomplete/incorrect submissions as per the above list would lead to disqualification of bid / proposal and no correspondence whatsoever would be entertained by Air India in this regard. Air India reserves the right to call for clarification / submission of additional documents, if deemed fit from the bidder.

6.3 A Compliance certificate duly signed and stamped by the authorized signatory of acceptance of all the terms and conditions of the TENDER should be submitted on the bidder’s letter head in the format as given at Annexure V.

6.4 The bidders must comply with all criteria mentioned in the TENDER and shall furnish all relevant documents in support of the information submitted in the bid / proposal. Air India reserves the right to verify/evaluate the information submitted by the bidders independently and the decision of Air India taken in that regard shall be final, conclusive and binding upon the bidder.

7. BIDDING PROCESS (TWO STAGES)

For the purpose of the selection of the successful bidder for Internal Audit assignment as per Air India requirements, a two-stage bidding process will be followed. The bidders are required to submit their proposals in response to the TENDER in two parts:

• Technical Bid (Part-I)
• Financial Bid (Part-II)

The bidders will have to submit the Technical and Financial Bids along with supporting documents in physical form.

7.1 TECHNICAL BID (Part I)

The bidder will have to submit the Technical Bid in sealed envelope, duly super scribing “Tender No. XXXX (Technical Bid)”. Technical Bid will also contain all the Annexures and supporting documents as required under this TENDER. Technical bid needs to be provided with full details and supporting documents as per the requirements of this TENDER for each of such locations.

Technical Bid should contain true photocopy of Financial Bid with Charges/Fees written as ‘XXXXX’ (bidder should ensure that no Charges/Fees figures have been mentioned in the copy submitted with the Technical Bid, failing which bid is liable to be rejected).

In the first stage, only Technical Bids will be opened and evaluated. The Technical Bids submitted shall be evaluated in respect of each of the locations for which Internal Auditor appointment has been sought under this TENDER. Only those bids satisfying the technical eligibility requirements as specified and determined by Air India as meeting the terms and conditions of this document shall be evaluated for next stage.

The Technical Bid should consist of the following:

i. Earnest Money Deposit as specified in this document

ii. Technical Evaluation Criteria as per Annexure III on bidder’s letter head along with supporting documents.

iii. Bidder’s Profile as per Annexure IV on bidder’s letter head.

iv. Certificate of Undertaking and Compliance as per Annexure V on bidder’s letter head including acknowledgement to execute Work Scope and specifications as per Annexure-II

v. Check List of documents as per Annexure VIII on bidder’s letter head

7.2 FINANCIAL BID (Part II)

To be sealed and super scribed with “Tender No.XXX (Financial Bid)” must confirm to the followings:

i. Fees/ charges to be quoted as per Annexure-IX in the given Financial Bid format only.

ii. Unconditional discount, if any, should be clearly indicated and would be applied to the quoted Charges/Fees during evaluation.

iii. Conditional discount, if offered, will not be considered for the evaluation.

The Financial Bids of only those bidders, whose Technical Bids are qualified, will be opened.

8. EVALUATION PROCESS AND SELECTION CRITERIA

8.1 Technical Bids Evaluation –

The Technical Bids will be evaluated in respect of each of the locations i.e. Delhi, Mumbai, Chennai, Hyderabad and Kolkata for their ‘compliance to the technical requirements’ of the TENDER as indicated in Annexures I to VIII. Air India reserves the right at its sole discretion to seek whatever information, documents, etc. from the bidder, as it may consider necessary for the purpose of evaluation of the bids.

The evaluation of Technical Bids shall be done in respect of each of the locations for which bids have been invited under this TENDER.

Technical Bid evaluation would be based on Bidders meeting all the Technical Evaluation criteria (TEC). Bidders not meeting any of the essential TEC listed at Annexure-III will be summarily rejected. The remaining bids, meeting all the TEC, and otherwise meeting all the terms and conditions of the TENDER, would qualify the technical evaluation.

8.2 Financial Bids Evaluation

a) The date and time of opening of the Financial Bids would be intimated in advance to the bidders who have qualified, and their authorized representatives only would be permitted to participate in the opening of the Financial Bids.

b) The Financial Bids of only those bidders who qualify and are shortlisted in respect of any of the five locations i.e. Delhi, Mumbai, Chennai, Hyderabad and Kolkata, after complete technical evaluation of their Technical Bids, would be opened.

c) The bid for each location with the lowest financial charges shall be evaluated for appointment as Internal Auditor for such location. Accordingly, appointment for each required location i.e. Delhi, Mumbai, Chennai, Hyderabad and Kolkata would be finalised and appointment letters / contracts executed.

In case of ‘Tie’ in the lowest evaluated financial bid amongst two or more bidders for any particular location, the bidder with more CAG ranking points will be selected as L1.

9 SIGNING OF CONTRACT

The successful bidder for each location i.e. Delhi, Mumbai, Chennai, Hyderabad and Kolkata, shall be required to enter into a contract with Air India (“Contract”), within 30 days or within such extended period as may be specified by Air India. The letter of acceptance and such other terms and conditions as may be determined by Air India to be necessary for the due performance of the work in accordance with the bid and the acceptance thereof including required changes in the work-scope, as required by Air India, would be incorporated in the contract. Contract document conforming to all agreed terms and conditions including those of TENDER shall be agreed upon and executed with the successful bidder. Pending execution of detailed contract, Air India may issue appointment letter to selected bidder on same terms and conditions as specified in TENDER, in which case, such letter is to read as with TENDER Terms and Conditions and bidder’s response thereto will be the governing documents.

The term of the Contract shall be initially for the period from January 2019 to March 2020. Air India reserves the right to extend the validity of contract for further period of one more financial year.

Air India reserves the right to stipulate, at the time of finalization of the contract, any other document(s) to be enclosed as part of the final contract.

10. IMPLEMENTATION OF THE INTERNAL AUDIT ASSIGNMENT AND REPORTS

The selected bidder will be required to submit acceptance of award of contract within the period of 10 business days from the date of communication of award/appointment letter. Delay on part of the selected bidder in taking up Internal Audit assignment will attract a penalty towards liquidated damages and Air India would also be entitled to terminate the contract.

The Internal Audit Programme implementation would be monitored closely by respective Air India Regional Heads of Internal Audit at Delhi, Mumbai, Chennai, Hyderabad and Kolkata, who would certify such implementation.

11. CONFIDENTIALITY / NON DISCLOSURE AGREEMENT (NDA)

11.1 Selected Bidder for each location will have to execute the Non-Disclosure Agreement (with no amendments) as per the format of Air India (Annexure VII)

11.2 The selected bidder (and his employees) shall not, unless Air India gives permission in writing, disclose any part or whole of any document, of the proposal and/or contract, or any specification, plan, drawing, pattern, sample or information furnished by the airline, in connection therewith to any person other than a person employed by the bidder in the performance of the proposal and/or contract. The employees engaged by the bidder in performance of this contract will maintain strict confidentiality for all data / information which come into their possession during the course of such performance.

11.3 The bidder, his employees and agents shall not without prior written consent from Air India make use of any document or information given by the user, except for purposes of performing the contract award.

11.4 In case of breach, Air India may take legal action as deemed fit.

12. SUBCONTRACTING OF ASSIGNMENT

No Sub-contracting of Assignment in part or whole of the work will be permitted. In the case of reconstitution of the selected bidder, Air India, at its discretion may allow the changed entity to continue to perform on same terms and conditions. Otherwise, such sub-contracting would be sufficient grounds for termination of contract under this TENDER for Air India without any notice.

13. INDEMNITY

The bidder, in the event of being selected under this TENDER, assumes responsibility for and shall indemnify and keep Air India harmless from all liabilities, claims, costs, expenses, taxes and assessments including penalties, punitive damages, attorney’s fees and court costs which are or may be required to be paid by reasons of any breach of the bidder’s obligation under this tender or for which the bidder has assumed responsibilities under this contract including those imposed under any contract, local or national law or laws, or in respect to all salaries, wages or other compensation to all persons employed by the bidder in connection with the performance of any system covered by the contract. The bidder shall execute, deliver such other further instruments to comply with all the requirements of such laws and regulations as may be necessary there under to conform and effectuate the contract and to protect Air India during the tenure.

In the event of any third party raising claim or bringing action against Air India including but not limited to action for injunction in connection with any rights consequential to performance or non-performance of the assigned tasks by the selected bidder or its employees, the bidder agrees and undertakes to defend and / or to assist Air India in defending at the bidder’s cost against such third party’s claim and / or actions and against any law suits of any kind initiated against Air India.

14. OBLIGATIONS OF AIR INDIA AS AUDITEE

I. Pay fees for the services rendered as stated in Clause 11(Invoicing and Payment) of Annexure-I.

II. Provide office working space, office equipment, telephone line, internet connection and access (Ids, PCs) to applicable systems such as SAP, RAMCO and such other applications at Air India Offices at Delhi, Mumbai, Chennai, Hyderabad and Kolkata.

III. Provide information/documents/records/books of accounts, etc., that would be required by the Internal Auditors during the course of the Audit. The Internal Auditors shall verify the records in the concerned Division and photocopies, if needed, could be provided on special requisition and at Air India’s discretion.

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